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Gold prices cut losses on worries of less dovish Fed

Published 03/18/2024, 12:40 AM
Updated 03/18/2024, 03:47 PM
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Investing.com-- Gold prices regained some ground Monday, but sentiment on the yellow metal soured by growing expectations that the Federal Reserve may lean less dovish on monetary policy later this week. 

Spot gold rose 0.1% to $2,164.05 an ounce. 

Fed meeting awaited for more cues on interest rates 

The Fed's two-day meeting, which ends on Wednesday, is expected to culminate in an unchanged decision on interest rates, but an updated outlook for the rate path ahead and economy will garner the bulk of attention.  

While a June rate cut continues to priced in as more likely than not, Goldman Sachs said it see a slower rate-cutting cycle following data showing recent economic strength and hitter-than-expected inflation.

ANZ analysts said in a recent note that gold prices could fall as low as $2,100 an ounce in the near-term. But they also upgraded their end-2024 price target for the yellow metal to $2,300 an ounce, stating that an eventual interest rate cut and deteriorating economic conditions were likely to support demand for the yellow metal this year. 

Other precious metals retreated on Monday. Platinum futures fell 2.4% to $920.65 an ounce, while silver futures slid 0.5% to $25.26 an ounce.

Copper prices retreat after mixed Chinese data 

Three-month copper futures on the London Metal Exchange fell 0.3% to $9,045 a ton on Monday, while one-month U.S. copper futures rose 0.2% to $4.13 a pound. 

While both instruments weakened, they remained in sight of 11-month highs hit last week, after media reports showed that China’s biggest copper smelters were planning production cuts. Such a scenario presents a supply shortage of refined copper, and was a key driver of copper’s rally.

But this rally somewhat cooled on Monday following mixed economic data from China. While industrial production rose more than expected in the January-February period, retail sales missed expectations, while unemployment hit a five-month high. 

The mixed data raised concerns over weak economic growth in the world’s biggest copper importer, which could hurt its appetite for the red metal.

(Ambar Warrick contributed to this report.)

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